If you were happy with your bonus for 2011, you are probably one of two things: a genuinely outstanding performer; someone who had their expectations managed-down adeptly before bonuses were announced.

To listen to some headhunters, this was the year that the bottom truly fell out of the bonus pool. “I haven’t spoken to a single person who’s been happy with their bonus this year,” says a partner at one financial markets search firm. “The situation around bonuses is one of real pain: the whole industry is being destroyed.”

“There are some people who think the bonus they received is in line with their expectations, but most seem to feel that companies have taken the opportunity to pay the least they possibly can,” says Christopher Robbins at Nicholas Scott Search and Selection. “Many people have been paid massively down, but the alpha generators have been paid as much as banks can afford.”

Hence last week, French banks SocGen and BNP both said they’ve reduced their bonus pools by 50%. This follows similar substantial reductions elsewhere, with a 60% reduction at UBS and a 41% reduction at Credit Suisse.

Unhappiness is highest at Credit Suisse and Barclays

Anecdotally, disgruntlement with 2011 bonuses is at a zenith among senior bankers at Credit Suisse and among the rank and file at Barclays.

At Credit Suisse, senior bankers are receiving a proportion of their bonus in the form of a new Partner Asset Facility scheme which matures in 8-9 years and can be partially cashed in after four years – but only with the agreement of the bank. Effectively, therefore, senior Credit Suisse bankers are locked in for the best part of the next decade.

At Barclays, disgruntlement is coalescing around the £65k cash bonus cap, which is unusually low for the industry.

UBS’s bonuses were announced only last week. Headhunters suggest broad variations: “Really good people at UBS were down 20%. Everyone else was down 20-70%,” says one.

Assessing the alternatives

Last year, banks were surprised that many of those paid zero in the 2010 bonus round failed to quit of their own accord. Much the same could happen in 2012: headhunters say there are very few jobs to go to.

“A lot of people would like to get out of places like SocGen, BNP and RBS, but there are just no bids,” says one.

The other alternatives are boutiques and mid-sized players such as Shore Capital; Redburn, Numis, Peel Hunt and Aldermore. However, this may be a case of frying pan to fire: equity trading volumes may fall further in the absence of macro economic improvement in Europe, predicts research firm Tricumen. Smaller players may find themselves more squeezed than ever.

The favoured option for many disappointed bankers is therefore likely to be disgruntled stasis – staying where they are. Unfortunately, this could lead to two outcomes later in 2012: another round of redundancies and further pay reductions. The more it becomes apparent that bankers who’ve had their pay slashed have nowhere else to go, the more banks will slash pay. The Financial Times suggests today that Chinese banks have been able to undercut international rivals on investment banking fees because they pay their staff 50% less. Compensation could have a long way to fall.